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Media: Can Google, Limewire Outplay iTunes?

The digital music market continues to be an exemplary battleground for the implications new media has on pre-established business practices. Startup gBox and infamous Limewire are venturing into the digital music market to try to trample the dominion of the lower case i, the Apple iTunes store that is.

The digital music market continues to be an exemplary battleground for the implications new media has on pre-established business practices. Startup gBox and infamous Limewire are venturing into the digital music market to try to trample the dominion of the lower case i, the Apple iTunes store that is.

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But how do they plan to compete with the well-established leader in digital music sales? By selling songs not encoded with that frustrating copy-protection technology, digital rights management (DRM). You know, the thing that prevents your friend from listening to the new Kanye song you just sent him because his computer is not “authorized.” DRM is designed to stop the illegal copying of music and limits the number of computers that can play the purchased song. The iTunes store’s songs will only play on the iPod, and the iPod won’t play DRM-enabled songs purchased at other online music stores.

But the major record labels, gBox and Limewire are all hoping that removing such strict DRM protection will expand the possibilities (and profits) of the online music market. After the Napster debacle, the music industry is learning that it might be more beneficial to try to incorporate rather than to all out destroy.

gBox officially launched on Tuesday with Universal Music Group announcing that it would test the sale of DRM-free music through the site by advertising with Google’s search results. Users who search for a specific Universal artist or album will be directed to gBox where they will be able to purchase the music for 99 cents and DRM-free. Google reinforced that this was an advertising venture only and that it has no plans to create an online music store of its own. Remember: it searches for content, it doesn’t create it. gBox is negotiating with other major record labels to distribute their catalogs protection-free.

Limewire, the flagship software pirate in the online music market, announced that it plans to go legitimate by opening its own digital music store with all DRM-free songs. The peer-to-peer file sharing software company will offer songs “a la carte” or through monthly subscription plans although pricing of these services has yet to be confirmed.

Even though a launch date has not been announced, the site already has deals with IRIS Distribution and Nettwerk Productions to provide music from their catalogs, primarily from independent music labels. But will Limewire be able to execute the plan that led to Napster’s downfall—trying to sell something they’ve been giving away for free? It’s still a smart move for the company to be seen as a legit distributor of online music, especially since the Recording Industry Association of America is currently trying to get $150,000 from Limewire for every song that’s ever been downloaded on the site.

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In February Steve Jobs deflected criticism of Apple’s use of the irritating DRM technology by stating that it was the record labels that demanded the strict protection. He urged the big four record labels, Universal, Sony BMG, Warner and EMI, to open up their music and make it more accessible for customers. Jobs said that he would embrace a switch to a DRM-free market. But will the record labels embracing Apple? EMI has agreed to sell DRM-free songs through the iTunes store but for an extra 30 cents. Now Universal has snubbed the iTunes store altogether and solicited the help of Google to test the waters with gBox.

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